The topsy-turvy world of finance
4 June 2008The topsy-turvy world of share market collapses, interest rates cuts and share market recoveries continued unabated throughout March. The American banking system, just as Julius Ceasar before it, failed to beware the ides of March and Bear Sterns suffered the same fate as good old Julius.
It appears that the American financial system and, therefore, the rest of the world needs to take more notice of the soothsayers.
For once in this crazy world of exchange rate fluctuations the UK is relatively unaffected in return for hides sold in Europe. While every market in the Euro zone has witnessed falling hide prices, the UK has remained steady entirely due to a 12% appreciation in the value of the euro against sterling since early November 2007.
However, there are signs, especially going into the fair in Hong Kong, that this situation will not continue. Rumours are rife among hide and skin dealers of extended credit terms being taken, usually without agreement, by even customers who would have been considered to be the most reliable of payers.
Furthermore, the abattoirs have now been crying for so long about how much money they are losing on each animal that they kill. Like the boy who cried wolf, everyone has stopped listening to them. If they want to pay too much for live animals then it must be because they have deep pockets filled from when they gave too little for the live animals. Let them get their own house in order.
The interesting thing about this current market is that hides continue to move, albeit with a degree of haggling involved but move they certainly do. Unfortunately, to keep the hides moving, sellers have had to widen their customer base to a degree that has put some of them outside their comfort zone.
There are those old-timers in our business who are predicting that the market will repeat the spectacular collapse of 1978 when hides fell by 75% in three weeks. It will be interesting to see if this happens no matter how unlikely this scenario is.
Prices at the end of March were as follows:
36kg+ 76p
31/35.5kg 82p
26/30.5kg 86p
22/25.5kg 1.00
And cows went for £24/26 depending upon weight.
Skins remained steady as we approach the end of the season with some interest coming from Spain for fellmongers for the first time in some years. Irish fellmongers went for 3.15 - 3.35 and English fellmongers went for £2.60-2.70. Both prices ex yard.
